Wednesday, April 01, 2009

[This posting is for informational purposes and should not be construed or interpreted as either legal advice on any matter or as in any way creating an attorney/client relationship]

In a 5-4 decision, the U.S. Supreme Court held today in 14 Penn Plaza LLC v. Pyett, that a provision in a collective bargaining agreement (CBA) that explicitly requires union members to arbitrate Age Discrimination in Employment Act (ADEA) claims is enforceable as a matter of federal law.

In Pyett, three union employees brought an action in federal court against their employer, 14 Penn Plaza LLC, under the ADEA. Pyett and his two co-workers were members of a union that had previously negotiated a CBA that explicitly provided that all discrimination claims between union members and Penn Plaza would be handled exclusively through arbitration.

Penn Plaza moved to dismiss the ADEA claim pending in federal court because the CBA mandated arbitration of discrimination claims. The district court denied the employer’s motion and, on appeal, the 2nd U.S. Circuit Court of Appeals affirmed the lower court’s ruling. Both courts reasoned that a union did not have the authority to waive a union member’s right to a judicial forum for a statutory discrimination claim.

The Supreme Court, however, disagreed. In a “straightforward” analysis of the ADEA and the National Labor Relations Act (NLRA), the majority stressed that the union, the collective bargaining agent for Pyett and his co-workers, had bargained with the employer, Penn Plaza, in good faith. The two sides agreed that employment-related discrimination claims, including ADEA claims, would be resolved in arbitration.

The Supreme Court previously had suggested that arbitration was “a comparatively inappropriate forum for the final resolution of [employment] rights.” The Pyett court dismissed this notion as a “mistaken suggestion.” It reasoned that management and union are free to negotiate an arbitration agreement: a contractual term that qualifies as a “condition of employment” subject to mandatory bargaining under the NLRA. The Supreme Court will not disturb a bargained-for contractual exchange because that would be contrary to one of the “fundamental policies of the National Labor Relations Act -- freedom to contract.”

Accordingly, employers, unions and their members are now on notice: a clear and unmistakable provision in a CBA mandating the arbitration of federal age discrimination claims will be honored. Further, there is good reason to believe that this carefully tailored arbitration agreement may extend to other federal discrimination claims if the federal statute itself does not preclude arbitration of such claims.

Comments

It is a sad day when the supreme court turns its' back on the elderly in favor of the big business funded arbitration clause.

One thing they can be sure of, in arbitration one is disposed of faster. When it comes to cheaper and fair there in lies the rub. The rules of law no longer appply when that door is shut. There is no appeal. Arbitration is secret for very good reason. Inside there is the great divide between the haves and the have nots. The crooks continue to bleed the American public, forcing families to financial and emotional chaos.Homeowners have hung on by their finger nails trying to give their families some similance of Christmas and the holidays before declaring bankruptcy and going into foreclosure. February had an increase of 28% in foreclosures for the same month last year.

Yet we bail out the crooks that brought our great nation to this?
Let big business learn what it is like to live on a budget. Let them learn to live on money they don't steal. The middle class has been put on hold. No one listens. We just hear recorded messages in the great cyberspace, where no one cares.The people we elected to govern our interest, govern their own. We are bombarded by the slick, small printed greed of big business. They have stealthily stabbed us with: substandard construction, defective homes, inflated appraisals, fraud, crooked mortgage companies, glutinous banks, arbitration companies, high interest bank cards, over priced drugs and claim denied insurance companies. This is what has destroyed the middle class, the back bone of this economy.

At first the powers that be said it was our fault. We were just stupid and bought more than we could afford.Then they said it was a down turn in the economy, liquidity, a market correction, bla, bla, bla... when it is really greed. Greed protected by arbitration clauses and guarded by the checkbooks of big business.

This all makes me think of American Indian. They signed pieces of paper and trusted our government and they too became homeless.
Jordan Fogal
jfogal281@aol.com